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April 18th in New Jersey saw citizens from across the state vote down almost 50% of proposed school budgets. This low level of approval, when viewed as a product of the typically low voter turnout of budget and school board elections, has sent a resounding message to the New Jersey school establishment. Indeed, when one considers the state’s “spend spend” take on school reform, and its widely known equity history for urban school systems under the Abbott v. Burke cases, the defeats are a heads up for many other places in the nation looking to finance their way out of poor school performance on the backs of suburban property owners.

 

Briefly, the Abbott decisions identified 31 districts believed to have too little property wealth to fund their school systems at a level sufficient to ensure the students therein received the state’s constitutionally mandated “thorough and efficient” education. There were many reforms adopted under the Abbott decisions, but the most important was a court mandate that these 31 “special needs” districts spend at the same level as the state’s wealthiest districts. To that end, New Jersey now has seven of the country’s top ten school districts over 10,000 students in terms of per pupil funding. Newark tops this list with a nearly $1 billion budget this year for its 42,000 students. Newark pays approximately 10% of its own school costs, with almost 80% being distributed in the form of aid granted directly from the state. The result of this spending? Seven of the cities 13 high schools have student failure rates on the state’s high school exit exam of over 65%, with two in the 80s. Clearly, Abbott students are not getting the education we are paying for.

Of course, state aid is a zero sum game. And every dollar that goes to a district that only pays 10% of its school costs does not go to a district that pays 90%. Indeed, this aid distribution has led to near 10% annual property tax increases in non-Abbott municipalities over the last five years. This pressure drove what amounted to a statewide referendum on school budgets.

This school finance arrangement has fractured New Jersey into three economic camps, with families in rural and middle-class communities feeling the heightened pressure of both the Abbott rulings and the wealthy school districts to which Abbott funding is indexed. A state legislator, during a recent discussion of school finance, said that soon, “only the filthy rich and obscenely poor” would be able to live in New Jersey. What is interesting, however, is the newly established position of education interest groups that an increase in the income tax would relieve property taxes and the heavy dependence upon them for school costs.

Nothing could be further from the truth. And any long-term New Jersey resident knows that income tax increases have already been proposed and passed already.  Each time the increase was supposed to cap the property tax problem…yet here we are again.

A discussion of revenue as it relates to schools is just one side of the coin–the side the education establishment prefers residents see. The real exchange, however, is had on the flipside, and involves the salaries, benefits, expenses, perks, and other line items that constitute school spending.

Increasing revenue from $10 to $12 means nothing if your expenditures rise from $14 to $20. And despite spending caps, many school districts are seeing their expenses increase at a pace far greater than the rate of inflation. With all due respect to enrollment spikes in some districts, the single largest line expenditure in any school budget is salaries. The New Jersey Education Association, NJ School Boards Association, and others continue to negotiate raises and benefits that far exceed those accorded New Jersey’s common citizen, and that far outstrip the ability of most municipalities to support them without exorbitant property tax increases. This is where the real change must be made.

We also must address the educational value of these increases. In 1972, the average NJ SAT verbal score was 530. In 2004, it was 508. All this while, even in inflation-adjusted dollars, the expense of education has risen to stratospheric levels. Simply put, a 10% increase in the annual school budget is not returning a 10% increase in student achievement, or student experience for that matter. In fact, it’s barely holding even.

School spending has remained a third rail in this state, and in many other states, for far too long. Even New York, with its current school funding issues and the Council for Fiscal Equity’s Abbott-like suit for nearly $5 billion in school funding increases in New York City alone annually, and almost $9 billion for capital projects, is blindly pursuing the road long traveled by New Jersey. With this in mind I submit that, if someone wants to live in New Jersey, keep a house, and support a family, it’s time to put on some rubber gloves, and grab that rail with both hands.

Derrell Bradford is deputy director of E3.